By Brett Norman, POLITICO
A lawsuit may have lit the fuse on a budgetary time bomb in Medicare, even though it simply reaffirms what should be a routine payment policy for services like physical therapy that the massive federal health care program has always had.
People on Medicare are entitled to various kinds of rehab and therapeutic services — occupational or speech therapy, for instance. But over the past 30 years or so, the coverage became spotty. Some people were able to get that care only if it could help them get better — not if it was aimed at keeping them stable or slowing a predictable decline. That became known as the “improvement standard.” The care was only for those who would improve.
In 2011, the Center for Medicare Advocacy went to court and a few weeks ago a legal settlement in Jimmo v. Sebelius was finalized, with the Department of Health and Human Services agreeing to clarify that Medicare is not bound by the “improvement standard” and will pay for a broader range of care.
It’s hardly a radical idea, and it’s clear that such treatments are covered by the Medicare law. But a wide range of patient groups report frequent run-ins with contractors that handle the Medicare payments, and health care providers turning down patients for services for which they didn’t expect to be paid.
“It’s pretty hard to understand how this happened, because it is plain as day in the law and the regs, but the improvement standard is an absolute fact, and a very real problem,” said William Dombi, vice president of the National Association of Home Care and Hospice, who was not a party to the suit.
Millions of Americans with Parkinson’s, Alzheimer’s, multiple sclerosis and a host of other chronic conditions could benefit from broader access to treatments that would help maximize their quality of life, even if they won’t regain any particular abilities that they have lost. And that’s true whether they are getting the care at home, at outpatient centers or in nursing facilities.
How much will the settlement cost Medicare? Nobody is quite sure whether it will lead to a slight boost in how many people get these services or whether it will lead to a raft of new services for the massive population of chronically ill seniors in the already strapped Medicare program.
Because the policy at the federal level is not officially changing, the Centers for Medicare & Medicaid Services insists that the settlement won’t have any budgetary effects.
But patient advocates say that’s naive given the widespread use of the improvement standard in practice, and they expect to see substantial increases in the use of therapeutic services that, in some cases, have been blocked until now.
“From the reaction we’ve gotten from people around the country — providers are excited, beneficiaries are excited — I hope and think we’re going to see a major change,” said Gill Deford, litigation director at the Center for Medicare Advocacy and the lead attorney on the case.
Some advocates also say that the extra services could pay for themselves, at least in part, because they may help stabilize patients’ conditions, reducing crises that require expensive hospitalizations.
Under the settlement approved Jan. 24, CMS agreed to remove any language that might cause confusion in its payment guidelines and to do an outreach campaign to contractors and health care providers, among others, to explain the policy in no uncertain terms.
Because of the uneven and haphazard way the “improvement” standard has wound its way into the system, it’s very difficult to predict what will happen.
There are no statistics on denials for such services, Deford and Dombi said. Even if there were, it wouldn’t begin to tell the full story.
“You still have to take into account the chilling effect it’s had on providers,” Dombi said.
Dr. Nicholas LaRocca, vice president of health care delivery and policy research at the National Multiple Sclerosis Society, said many MS patients can benefit greatly from physical, occupational and speech therapies, but the improvement standard has caught many in a “Catch-22.”
Aware of the standard, some therapists have refused to offer their services upfront, which takes away the beneficiaries’ ability to seek legal relief, LaRocca said.
“If somebody receives a service, and Medicare denies it, you can appeal,” he said. “But we couldn’t even do that, because in many cases, they stopped us at the door in the first place.”
Deford reviewed cases of improvement standard denials being appealed to administrative law judges. He said the judges overwhelmingly sided with patients because the law is straightforward.
But even if there were statistics on appeals, they would reflect “just a tiny fraction” of the coverage denials because the vast majority of people don’t go through the trouble of taking Medicare to court, Dombi said.
The anecdotal evidence for widespread, if uneven, cases of those denials, is substantial.
Roshunda Drummond-Dye, director of regulatory affairs at the American Physical Therapy Association, said physical therapists have seen an increase in the number of denials for so-called maintenance care in recent years as HHS has ramped up efforts to combat fraud and abuse, which has been a problem in physical therapy services and home care.
The group has circulated guidance to its members about the kinds of skilled therapy Medicare will cover and how to document it so that the claims will be approved. But it keeps getting complaints about denials.
An official with the Medicare Payment Advisory Commission, an independent group of experts that advises Congress on Medicare issues, particularly payment policy, called Dombi after the settlement was announced to ask how big an impact he thought it would have.
“It’s tough, because if you say the effect will be little, they will think it’s not a problem, and it is,” Dombi said. “But if you say it will have a big effect, then they will start figuring out how to clamp down on it.”
He said he would guess that it would increase the number of home health care patients by about 1 percent — or 35,000 in a year, but also, that it was very hard to predict.
“Whether it’s 1 percent, or 5 percent, or otherwise, it’s going to have a very material significance for a lot of people,” he said.
But if CMS says it will have no effect and advocates say it will be world-changing, Dombi concluded, “Most likely it will be somewhere in between.”
The impact will partly depend on how CMS goes about updating payment guidelines in the coming year, and perhaps more important, whether the education campaign that will follow will be strong enough to root out the improvement standard where it has taken hold.
“Medicare is a huge program. It’s sort of like turning an ocean liner,” LaRocca said. “It’s going to take time for the rules and guidelines being changed, and for the staff and vendors that administer the program to change. A lot of people will be watching very carefully how this plays out.”